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Why business is like ... football transfers

Last summer, before the football season started, Tottenham Hotspur was engaged in a game of brinkmanship with Manchester United over the sale of Dimitar Berbatov. Spurs had accepted the fact that its most valuable asset wanted to make his dream move to football's biggest club, but it was determined to get every penny it could for handing him over.

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Published: 01 Jan 2009

Last Updated: 31 Aug 2010

Man United offered £20m. The London club held out for £30m.
A game of high-profile chicken ensued, only to be concluded in the
moments before the transfer window slammed shut, when United caved in,
laying out £30.75m for the prized striker.

Spurs had its victory, but also a problem: it had lost a talismanic
player and been so focused on the deal that it had failed to secure good
replacements. Hopes of a top-four finish quickly dissolved as the club
fell into turmoil, recording its worst start to a season since 1912. Out
went the manager, and the leadership structure had to be overhauled.

There's a lesson in Spurs' Pyrrhic transfer victory: not every result is
worth the price paid by the victor. Look at RBS: it may have won the
battle for ABN Amro, but it's hardly cheering now. The rule also holds
true for litigation. In a recession, supplier contracts are more likely
to be broken, clients more likely to try to wriggle out of their
obligations. And potential litigants are more inclined to fight for what
they feel is owed to them, making litigation more common. It's always
tempting to play the Spurs role - chasing people for everything they
can.

But at such times it's fatal to be distracted from the work that really
matters: building a stronger business. Better to cut your losses, if
that enables you to keep your eye on the ball. You don't want to find
yourself at the bottom of the table.